Employment in the U.S. solar industry fell in 2018 by around 3.2%, according to a report published by the Solar Foundation, a non-profit pro-solar energy group.

As of November 2018, the solar industry employed more than 242,000 solar workers. That was around 8,000 fewer jobs than in 2017.

The report blamed the decline on uncertainty over the outcome of a federal trade case in the lead-up to new solar tariffs that were announced by the Trump administration in January 2018. The uncertainty led to project delays, especially for the larger, utility-scale installations. The report also said that state policy and economic challenges led to job declines in some states with well-established solar markets. California and Massachusetts were among the hardest-hit states.

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State policy and economic challenges led to job declines in some states with well-established solar markets.The report said that demand-side sectors (made up of the installation and project development sector, and the wholesale trade and distribution sector) accounted for 76% of overall solar industry employment (184,400 jobs) in 2018.

Manufacturing represented 14% (33,700 jobs) and operations and maintenance comprised just under 5% (11,000 jobs). Jobs related to engineering, legal and financing firms accounted for just over 5% (13,000 jobs).

States that suffered the largest job reductions between 2017 and 2018 included California (-9,576 jobs), Massachusetts (-1,320 jobs), North Carolina (-903 jobs), Arizona (-857 jobs), Maryland (-808 jobs), New Jersey (-696 jobs), Georgia (-614 jobs) and Hawaii (-595 jobs).

Despite the losses, 29 states saw solar job growth in 2018, the report said. States that experienced gains included Florida (+1,769 jobs), Illinois (+1,308 jobs), Texas (+739 jobs), New York (+718 jobs), Ohio (+644 jobs) and Washington (+612 jobs).

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Solar tariffs

The report outlined the effect that higher import tariffs for solar cells may have had on solar sector employment. In April 2017, two U.S. solar manufacturers petitioned the U.S. International Trade Commission to impose tariffs on all imported crystalline silicon solar modules and cells. Uncertainty around the outcome made it difficult for U.S. solar project developers to price, bid and contract for future projects, the report said.

The uncertainty led to the postponement of a number of solar projects and to scaled-back installations in the first three quarters of 2018. Especially hard-hit were utility-scale solar projects, which typically have longer project development times and are more sensitive to increases in hardware costs.

In the third quarter, the utility-scale segment made up around 39% of new solar deployment, its lowest share since early 2012.Data cited by the report said that in the third quarter of 2018, the utility-scale segment made up around 39% of new solar deployment, its lowest share since early 2012. Utility-scale typically represents about 60% of new installations, the report said.

After the Trump administration in January 2018 set tariffs for crystalline silicon modules and cells, China responded by cutting its solar incentives. The report said this reduced module demand and lowered module prices. The Chinese policy shift hurt solar manufacturers, but encouraged U.S. developers to move forward with projects.

The average price of solar panels in the U.S. fell to 38 cents per Watt in the third quarter of 2018. That compared to 45 cents per Watt a year earlier, the report said.

Policy uncertainty

In 2018, California and Massachusetts both lost jobs for the second year in a row, in part due to policy changes. California passed new policies in 2018, including a rooftop solar mandate for new homes and an expansion of its renewable portfolio standard (RPS). These policies are likely to stimulate employment growth, the report said, but the impact will play out over a number of years.

In addition, local governments worked to ramp up their community choice aggregation (CCA) operations. And the report said that non-residential installers in the state faced policy uncertainties over rate structures.

Massachusetts faced policy uncertainty due to the delayed release of the Solar Massachusetts Renewable Target (SMART) program. The report said the delay weakened the state's non-residential market. The SMART program launched in September 2018 and prompted a flurry of initial applications.

In other states, favorable solar energy policies helped drive job gains in 2018. Illinois is implementing its Future Energy Jobs Act initiative, which includes an Adjustable Block Program to support distributed energy systems and community solar projects.

In other states, such as Texas, the declining cost of solar energy installations helped encourage growth even without new policies.